Top three mortgage frauds and how to spot them

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Income misrepresentation red flags:

  • Withholding not consistent with paystubs or stated earnings
  • Pay stubs not computer generated even if from a large company
  • Year-to-date totals do not tally with totals from pay cheque to pay cheque
  • Social insurance number not consistent as those appearing in other documents submitted
  • Pay period date not consistent with calendar
  • Employer and employee names and employer address not consistent

Valuation fraud red flags:

  • No CMA appraisal available or if available not applicable to property
  • In multi-unit property comparison is being drawn using units in the same building or complex
  • Chattels are used as deposit or as partial payment
  • Renovation value is included in the sales price
  • Commercial property has a residential-type financing of LTV ratios
  • Listed property is owned by a corporation but has a mortgage in excess of 80 per cent of property value
  • Property list price is unusual for neighbourhood or appraisal was provided by parties to the transaction

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  • Andy on 2012-10-04 5:03:03 AM

    Then there’s the not so savvy attempted fraudsters: I had a client last month ask me if she could just “white out” the CRA balance owing on her NOA. I said “Well, I’m certain that you have the ability to do it, but if you send it to me I have to call the RCMP.” Then I fired her explaining that I would now have to treat all her supporting documents as questionable and that I just wasn’t prepared to continue our relationship if I couldn’t trust her AND I wasn’t prepared to put any of my lenders, and my very valuable lender relationships, at risk.

    All of us want to get paid, but if any of us ever gets even a whiff that something’s not right, the best thing to do is err on the side of caution and walk away because our hard-earned reputations are worth far more than any amount of money, and the hassles of an investigation would end up jamming up valuable time that could be better used to service HONEST clients.

  • John Dearin RPA,. AMP. on 2012-10-04 8:09:41 PM

    If Andy wants a job in NL, call, there is one waiting.

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